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FPC has secured all announced design wins for smartphones and tablets and has now established itself as the global market leader

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Fingerprint Cards AB (publ), Corp. Reg. No. 556154-2381, (FPC),

First quarter, 2013:

  • Sales totaled SEK 9.1 M (5.2).
  • Gross profit was SEK 0.1 M (loss: 0.3).
  • The loss after financial items amounted to SEK 12.0 M (loss: 9.0).
  • The gross margin was 1% (neg.)
  • The loss per share totaled SEK 0.23 (loss: 0.21).
  • Cash and cash equivalents at the end of the period amounted to SEK 148.5 M (28.5).
  • The order backlog at year-end was SEK 42.4 M (46.3).
  • FPC opened an office in Japan and appointed a Senior Technical Manager.
  • FPC opened an office in Seoul, Korea, and appointed a Senior Sales Executive.
  • FPC was granted an operating line of credit from Nordea and EKN.
  • FPC secured its first mass-production order of 100,000 sensors from CrucialTec for use in mobile phones.
  • FPC secured its first design win (DW)* for the FPC 1080A for tablets from a prominent Chinese house of design.
  • FPC strengthened its Supply Chain Management, recruiting Magnus Hansson as Senior Sourcing Director.
  • FPC’s technology chosen by a globally leading supplier of financial information for its authentication solutions.
  • FPC secured DW in China, for mobile-phone and tablet accessories and received initial order for 800,000 FPC 1080A sensors.
  • FPC appointed Jonas Andersson as Director Business Development in secure mobile transactions.
  • FPC held an Extraordinary General Meeting and resolved on an incentive program.
  • FPC redeemed 430,892 warrants in exchange for new series B shares and raised SEK 6.8 M.
  • FPC entered into an investment agreement with Carnegie regarding the new issue of Class B shares.
  • FPC secures Chinese order for area sensors valued at SEK 20 M.
  • FPC implemented private placement of Class B shares for SEK 95 M.
  • FPC published prospectus due to entry of new shares into trade.
  • FPC’s FPC 1080A selected by Chinese mobile-phone manufacturer behind a well-known European brand.
  • FPC secured its first DW for mobile phones in a strategically important third market in Asia.

Notable events at the close of the reporting period:

  • FPC received DWs for four new mobile phones and a tablet device from an existing, well known customer in Asia.
  • FPC won smartphone DW from one of China’s three largest manufacturers.
  • Fingerprint Cards becomes new sponsorship member in FIDO alliance.
  • FPC won DW for flagship model from a global top-ten manufacturer.
  • FPC opened regional Asian office in Shanghai and recruited three new employees.
  • FPC won smartphone DW from one of China’s top ten manufacturers.
  • FPC joined GlobalPlatform.
  • Forecast for 2013 reiterated: sales of SEK 130-190 M, EBITDA 20-35%.

*FPC’s definition of a design win (DW): The decision by a manufacturer to start developing one or more commercial products that will contain FPC’s technology as an integrated element of the manufacturer’s product(s).

For more information contact: Johan Carlström, President and CEO, Fingerprint Cards AB (publ), +46 31-60 78 20, investrel@fingerprints.com
Fingerprint Cards AB (publ) discloses this information pursuant to the Swedish Securities Market Act (2007:528) and the Swedish Financial Instruments Trading Act (1991:980). The information was issued for publication on April 25, 2013, at 8:00 a.m.

Important information
Issuing, publishing or distributing this press release may be subject to restrictions in certain jurisdictions. Recipients of this press release are responsible for using this press release and the information herein in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer or an offering to acquire or subscribe for any of the company’s securities in any jurisdiction.

CEO’s comments
It is happening NOW!
It is NOW that all of the major mobile manufacturers are testing, evaluating and deciding whether to have sensors in the mobile phones that they will launch ahead of the key Christmas sales season and thereafter during 2014. Many of the DWs that are secured until late May will probably be launched in 2013. We are in intense discussions with all Tier 1 manufacturers (except Apple) and we believe that at least six – and probably as many as nine – of the largest manufacturers will have either launched a mobile with sensors or have a project under way by year-end. In the level below, Tier 2, we believe that the majority will have launched a mobile with sensors by the summer of 2014. For the sake of clarity, a DW does not always lead to an order, but in most cases it does, and no manufacturer commences a mobile project without intending to launch the mobile within six to 12 months. During the past two quarters, FPC has received 16 DWs in mobile phones, tablet devices and accessories, thus securing 100% of all globally announced DWs. Several independent market analysts believe that Apple will launch an iPhone with a built-in sensor during the summer or no later than autumn of 2013, which will accelerate the integration decisions of other companies. Globally, PC sales declined sharply in 2012 and will probably continue to decrease moving forward, while the number of tablet devices sold will increase substantially. For this reason, FPC has focused to date on smartphones and tablet devices, which has significantly contributed to our technological leadership. The technology required to integrate a fingerprint sensor in a mobile phone compared with a laptop is more demanding, which makes us better equipped to satisfy future requirements. A mobile phone is small and has no network connection, which means that the sensor must be smaller in relation to all dimensions (height, breadth and depth) and must be energy efficient. The sensor must also be easy to integrate, primarily on the front of a smartphone. Accordingly, FPC has begun developing the smallest and most energy-efficient sensor in the world, with power consumption of about 1 mA during fingerprint scanning, while our competitors offer consumption of 13-35 mA for the same usage, which we have had confirmed through the DWs we have secured. We also offer by far the best image quality of all sensors, which enables us to deliver a complete 3D model of the fingerprint for increased security.

FPC deploys silicon-based capacitive sensors, while the competition uses flex-films-based sensors, which are difficult to industrially package and from which it is challenging to achieve an acceptable production yield. However, the decisive disadvantage with flex-film-assembled silicon is that its performance is currently too poor to enable placement under glass, which already means that such sensors require post-processing to enhance the delivered image, thus resulting in inferior power consumption. When the market and the technology are sufficiently mature for sensors that work under and through glass, which we expect to be during 2014 and thereafter, receiver performance will be required, which flex-film-assembled silicon is currently unable to manage, but which is made possible by our silicon-based pixel matrix. FPC has for some time been working with a completely new generation of sensors, thus capitalizing on our already superior image quality and reception performance. In other words, we are best positioned to be able to place the sensors under glass in a smartphone in which these qualities are pivotal – an opinion that is shared by all of the industry players with which we are currently working for our forthcoming sensors. This will create additional maneuverability for our customers to integrate our sensors into their phones with greater flexibility. Finally, we are working to develop new industrial standards that will enable new user cases for protecting the privacy of individuals, securing mobile transactions and payments and offering an attractive user experience.

Overall, this is the basis for our optimistic view of the year ahead, during which we believe that an overwhelming majority of the world’s top 20 manufacturers will integrate a sensor into their smartphones. By 2015, fingerprint sensors in mobile phones will be as commonplace as a camera, large touch screens and Bluetooth are in today’s phones.

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